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Louisville moves toward solar energy agreement

City to approve agreements with Alpine Bank, CEC on Aug. 16

Solar panels are shown being installed on the roof of a downtown Boulder building. (The Denver Post file photo)

Solar energy continues to become a more prevalent source of energy throughout the U.S., with individuals opting toward clean power.

In keeping with the trend, Louisville's City Council will look toward multiple agreements later this month where officials would commit to purchase 400 kW of electrical production from a Clean Energy Collective (CEC) solar array, and through a lease-purchase financing agreement with Alpine Bank and related documents with CEC for solar panels rated to produce an additional 199 kW of electrical production.

The proposed lease purchase agreement is for an additional capacity in CEC's Boulder array, at a purchase price of $675,027, financed over 15 years at an initial interest rate of 4.75 percent through 2018, then dropping to a rate of 3.75 percent in March 2019 until the remaining principle is paid off.

City Council will vote on the agreements at its next meeting on August 16.

The city expects costs associated with the two agreements to be fully offset with savings accrued over the term of the agreements.

"Financially it makes good sense," said Louisville City Manager Malcolm Fleming. "Besides the significant environmental benefits, it looks like they will save us around $280,000."

Assuming the future cost of electricity increases an average of two percent annually, the costs and savings associated with the combined agreements would break even in 10 years, said officials at a city council meeting on Tuesday, adding that with a maximum net cost of less than $4,000 annually during the first four years, and total net savings of about $280,000 over 20 years.

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If the future cost of electricity increases more than an average of 2 percent annually, savings would be greater. Conversely, if the future cost of electricity increases less than 2 percent annually, the anticipated savings associated with the agreements would be lower or it could actually cost the city somewhat more than not entering these agreements and continuing to buy the same amount of electricity directly from Xcel Energy.

"If energy prices increase more than 2 percent then the savings would be greater," Fleming said. "If energy prices increase less than two percent a year in the future then the savings would be less, or it could even cost more to go this approach."

However, in addition to the financial implications of the agreements, obtaining a total of 599 kW of electricity from solar sources would provide environmental benefits, according to officials.

Over 20 years, carbon dioxide emissions from 599 kW of solar generated electricity would be 36 million pounds less than the carbon dioxide emissions from electricity generated from fossil fuel sources, according to officials, adding that it is comparable to the impact on carbon emissions of planting more than 56,000 trees, according to officials.

"This is consistent with the citizen survey," said Councilwoman Ashley Stolzmann. "I'm really excited to see additional solar energy from us. This is a really unique opportunity for us because it allows us to 'de-peak' our system — where if we buy our own solar panels we have to apply them to whatever energy, and not the peak demand which is a special charge on our commercial facilities. It really allows us to lower our bills much more substantially."

In addition to solar uses throughout the city, many residents have expressed strong support in recent months for hosting solar or renewable energy at the recreation center, according to Councilman Jeff Lipton.

In an initial move toward solar power on July 14 of last year, city council approved a lease purchase agreement with Alpine Bank for solar panels supplied by CEC, according to official city documents. This lease purchase covered 145 kW of solar capacity with total estimated lease payments of $678,449, offset by projected bill credits of $908,386 and $401,947 in renewable energy credits, for total projected-reduction in the city's cost for electricity of $631,883 over 20 years.

The proposed Capacity Commitment Agreement (CCA) would commit the city to purchasing from CEC 400 kW of electrical production from solar panels in an array that CEC will be constructing in 2017. In exchange for this commitment, the city would receive bill credits from Xcel Energy. Under the terms of the agreement, the initial bill credits would be 10 percent higher than the price of the electricity purchased from CEC.

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